Not surprising, then, that many companies selected by Boots, including Carillion, Wates and EC Harris are going through something of an IT shopping spree. And they are not alone.
To meet clients' needs, construction firms are investing in web-based products, including intranets – websites that are accessible only to the employees of a company – and extranets, company websites that provide limited access to select external users such as major clients. Though neither are new bits of kit, contractors and consultants are investing heavily to boost the interactivity of these products so that more information and projects can be managed online. For example, EC Harris has increased its IT budget by 50% over five years rising to £5m this year (see box overleaf). But as the spend grows, so does the debate on the best approach to take. Should firms develop their own systems and thus provide watertight security for sensitive business data, like contractors Bovis Lend Lease and WS Atkins? Or is it wiser to leave it to the specialists and buy off the shelf packages like Carillion and save money in the process? Either way, firms have to ask whether their investment offers value for money or whether it amounts to bags of cash for little in return.
For Bovis Lend Lease, the development of a company-wide project management extranet is essential as its market base becomes increasingly international. The company has 90 offices across 40 countries, which are divided into three regions: Europe, Asia Pacific and the Americas. Each geographical region has its own area network with facilities to manage projects online. Bovis Lend Lease plans to link these areas through its new project management extranet HUB. This will be launched in the early part of next year, with the aim of improving communications throughout the group and the consistency of its services. Larry Atkins, chief operating officer at the group, explains: "HUB is all about customers, and they are demanding consistency. A customer wants to know what to expect from the company, whether they work with us in China or California. HUB will help us achieve a global standard rather having three standards – one for each region."
WS Atkins hopes its intranet, Blue Pages, will help staff manage their time more effectively and boost relationships with clients. The system, which is due to go live on 2 July 2002, will deal with time sheets, expenses and car hire online.
Richard Cuthbert, director of consulting at the group, describes Blue Pages as a customer relationship management system that will play a major role in the company's restructuring plans. But in order for the IT systems to handle an interactive intranet, the company is having to revamp its whole system. As a result, it now outsources its IT services to consultant Cap Gemini and is installing a new finance system, developed by consultant JD Edwards, using Oracle software.
Cuthbert says the changes must be made in order to cut costs and improve efficiency.
"To remain competitive, we need a higher technological capability. Some people will lose their jobs – mainly those from admin – but we must move on," says Cuthbert.
WS Atkins is also continuing to develop its extranet and online project management system Pronet, in response to the growing amount of information flowing through the company. More than 3500 people across 100 international offices are registered to use the system, which was set up in 1999. Tim Broyd, research and infrastructure director at WS Atkins and creator of Pronet, says the extranet's financial benefits are hard to measure, but they are not its only advantages: "The idea is that Pronet should save on waste, which is why it's difficult to quantify its financial impact on the company and why we don't have particular cost-saving targets for Pronet to meet. What is clear is that it promotes a stronger culture of sharing in the company. It is information technology's ability to hold people together that is increasingly important." E E Carillion agrees that continuous investment in IT is essential, but its approach is very different from that of WS Atkins or Bovis Lend Lease. Carillion decided to use the services provided by Bidcom, a specialist provider of online collaboration packages. "Our core business is not the development of software – the set-up costs of an online project management tool are prohibitive," says Steve Connor, Carillion's director of IT. He adds, "Our payments to Bidcom fall into the same category as electricity bills. It would cost Carillion millions of pounds to set up a similar system."
But not all contractors and consultants are convinced that it is either safe or efficient to manage projects through an information management system organised by a third party.
For Alec Milton, associate director at consultant Arup, security is the watchword when considering the use of an externally hosted extranet to hold sensitive company information. "The first fear to tackle is whether the service provider you are using will still be there tomorrow," he says.
Milton points to the precarious financial state of some service providers. "There are too many companies offering a similar service, so we can't expect them all to survive. Before entering into a contract with a service provider, you need to ask serious questions about what would happen to your company's data if the service provider went bust."
Milton also questions whether the retrieval of project information can survive the relentless advance of technology. "When the project finishes, who will continue to service the technology that has underpinned the project? The service providers may argue that you can dump this information in an archive, but accessing this information could still mean that you are reliant on the service provider, which is not an ideal situation to be in."
Milton believes there is also the possibility that somebody, including your client, could get into the system and block it, which means you are cut off from continuing work on the project.
The main suppliers of construction software include UK-based Bidcom, 4Projects and Irish company Buildonline. Production development director at Bidcom, Nathan Doughty, says the main advantages of outsourcing extranets and online project management systems are cost savings and a secure environment for data. He says: "A company needs to establish whether software development is really a part of their core business." Doughty argues that by taking on responsibility for project data, Bidcom is mitigating the risks of a contractor. "Maintenance of databases is, of course, an absolute priority. We are specialists using software developed by Citadon, based in the US, which has invested about £70m over the last four years ensuring that our systems are flexible. Very few companies can afford this level of investment and very few have the expertise."
Some professionals question whether construction is ready for all the IT innovations that are being introduced. As Huw Thomas, architect at Foster and Partners, said at last month's Construction Industry Computing Association annual conference: "It can take the lifetime of a project for employees to actually understand how to operate the extranet that manages the project. People still don't know how to work them."
But construction's largest companies are convinced sophisticated extranets and intranets are the only way forward. And are they put off by fears of an economic slowdown? Bovis Lend Lease's Larry Atkins says: "We are not put off at all. We are committed to improving IT." He adds thoughtfully: "E-business is still in its infancy; nobody knows who the winners will be."
EC Harris: The five-year IT plan
Consultant EC Harris this year dedicated £5m of its operating profit to the development of its IT systems. Its five-year plan to link the company’s international offices with real-time connections, started in 1996, is now operational. Philip Youell, operations manager at EC Harris, says the company is now speaking with one voice through the upgraded intranet. “The company delivers 19 different services across 35 foreign offices. Our clients want efficiency and consistency, so we have developed an intranet that will help us to give our clients a single, reliable service.”EC Harris sees the ongoing development of its intranet as a key tool for enabling future global growth and for better managing the company’s acquired knowledge. As Youell says: “We are gaining 20 new people a month, so we need to disseminate knowledge fast.”
The first step was to invest in the infrastructure of the IT system. Peter Madden, partner at the group, observes: “If you are shipping sensitive information around the globe, your connections must be secure.” The IT team has installed a wide area network throughout its offices, which means all its machines are operating from the same internet server provider. This system alone requires £5m investment, and provides the group with the power to email large CAD images and massive files of project information. By January, EC Harris employees will be able to manage their internal databases through the intranet. Information about staff’s skills and experience will also allow partners to allocate work to the person best placed to do the job. “As a company reaches a certain size, the need to organise its skills base becomes more important,” says Youell. An important concern in the development of the intranet was to provides clients with access, sometimes even combining IT systems with them. And for the future, EC Harris is looking to find a way of transferring data from a client’s systems into its own. “This would speed up projects no end, as many hours are lost punching in data at the start of projects,” says Youell. The data would automatically get sent through to a project’s “data cube”, which is accessible through a website so it can be used again. EC Harris’ IT team says its biggest challenge is to encourage those who are not comfortable with technology to use it. “It’s our job to prove the benefits of the intranet – as time goes on they will speak for themselves,” says Youell.
